Please use this identifier to cite or link to this item: https://oa.inapp.org/xmlui/handle/20.500.12916/461
Title: NDC schemes and heterogeneity in longevity: proposals for redesign
Authors: Holzmann, Robert
Alonso-Garcia, Jennifer
Labit-Hardy, Heloise
Villegas, Andres M.
Keywords: Invecchiamento della popolazione
Pensionamento
Pensione
Issue Date: 1-Aug-2019
Citation: Holzmann R., Alonso-García J., Labit-Hardy H., Villegas A. M., NDC schemes and heterogeneity in longevity: proposals for redesign (2019), Roma, INAPP, WP, n. 24 <http://oa.inapp.org/xmlui/handle/20.500.12916/461>
Abstract: A positive relationship between lifetime income and life expectancy leads to a redistribution mechanism when the average cohort life expectancy is applied for annuity calculation. Such a distortion puts into doubt the main features of the NDC (nonfinancial defined contribution) scheme and calls for alternative designs to compensate for the heterogeneity. This paper explores five key mechanisms of compensation: individualized annuities; individualized contribution rates; a two-tier contribution structure with socialized and individual rates; and two supplementary two-tier approaches to deal with the income distribution tails. Using unique American and British data, the analysis indicates that both individualized annuities and two-tier contribution schemes are feasible and effective and thus promising policy options. A de-pooling by gender will be required, however.
URI: http://oa.inapp.org/xmlui/handle/20.500.12916/461
Appears in Collections:Rapporti tecnici



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